Good faith breach costly for southern trust

A southern social services provider made misleading and deceptive statements during collective pay bargaining, an Employment Court decision says.

The Dunedin-based Pact group, a registered charitable trust, has lost its appeal in the Employment Court after it challenged an Employment Relations Authority determination.

The authority had earlier found the company breached its obligations of good faith by misleading the Service and Food Workers Union and Public Service Association during collective bargaining and breached a clause of its collective agreement in 2011.

Most Pact employees belonged to one of the unions but some were not members of either.

The Employment Court decision, released this month by Judge Graeme Colgan, ordered Pact to pay each of the union members who were employed by it on November 4, 2011, a sum equivalent to 2 per cent of gross wages or salary they had earned between July 1 and November 4, 2011. It also ordered the company pay interest.

It was also ordered to pay a penalty of $5000.

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The decision says Pact made misleading or deceptive statements repeatedly throughout the bargaining process, which lasted several months.

It gave wage increases to a significant number of non-unionised employees of more than 1 per cent after assuring the unions that it could not afford to do so, it says.

The decision also says it was serious bad faith, because Pact repeatedly acknowledged it wished to have paid its employees more than it said it could and was prepared to.

Pact's lawyer said it was "simply part of the strategic cut and thrust of robust industrial bargaining".